The EUROCARIB TOURS is a major London-based European tour operator focusing on Caribbean holidays. EUROCARIB is planning a summer holiday trip to a Caribbean Holiday Resort lasting one month. CHTC will charter an airplane that carries only its tourists. The company will also book a floor of a hotel at the resort to accommodate its tourists. Both the airplane and the hotel accommodation will cost EUROCARIB £120,000, the variable cost per customer is £400, EUROCARIB will charge £1600 per tourist for the 4-Week holiday trip.
A. Examine the concept of CVP analysis and explain its importance in the financial management of a travel and tourism business such as EUROCARIB [P1.1].
B. Provide an analysis of pricing methods that EUROCARB can use to determine the price to charge each tourist on the trip [P1.2].
M1: To achieve M1, you should have applied effective approach to study and analyse the appropriate pricing method with justification to be used by EUROCARIB. [Task 1 B].
C. Analyse the factors that will influence the profit EUROCARIB will earn on the holiday trip [P1.3]. Using the data provided in the scenario above.
D1: Evaluate the viability of the holiday trip if 90 tourists book to go on the trip and draw conclusion with justification whether EUROCARIB should organize the trip if it wants to earn a profit of at least £30,000 [Task 1 C].
Task 2 for LO 2:
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Context and Scenario:
EUROCARIB wants to improve its decision making procedures by adopting modern management accounting decision making techniques. For this reason, the finance director requires you, as a newly employed finance officer to draft a guide for use by colleagues.
A. Explain the different types of management accounting information that could be used in EUROCARIB [P2.1].
M2: You should have identified and applied a range of techniques (such as variance analysis) that can be applied in improving activities and performance within the company such as the EUROCARIB.
B. Assess the use of investment appraisal techniques as decision-making tools [P 2.2] using an example from EUROCARIB or other relevant company.
Department of Travel, Tourism and Hospitality Management
Task 3 for LO 3:
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Context and Scenario:
You have been asked by the finance director to write a paper that explains financial statements analysis to the directors of EUROCARIB.
A. Download the main financial statements of ANY travel and tourism company of your choice and interpret the financial statements using appropriate ratios for profitability, liquidity, and investment [P3.1].
M3: Use appropriate approaches and structure to present and communicate the findings in manner suitable for the management.
D2: For this, you should have planned, organised and managed substantial activities to collect data and analyse the company financial statements and to present it appropriately.
D3: Apply creative thinking in concluding whether the company is financially stable in the long term on the basis of your analysis of profitability and liquidity (D3).
Task 4 for LO 4:
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Context and Scenario:
In future trips, instead of going to hire a hotel for its tourists, EUROCARIB intends to construct its own hotel in the Caribbean, having obtained a suitable site. That will cost £25 million.
A. Analyse the sources of funding, both internal and external) the company can obtain in developing the new hotel [P4.1].